Reining in Canada’s Federal Bureaucracy by Emulating Chrétien’s Approach

Viewpoint demonstrating how to rein in the federal bureaucracy, while simultaneously taking a meaningful step toward restoring Canada’s fiscal health

Related Content

Tens of thousands of federal public service jobs should be eliminated, think tank says (National Post, May 15, 2025) Think tank calls for ‘Chretien-style’ review of federal public service, resulting in thousands of job cuts (CTV News, May 15, 2025) Fonction publique fédérale: une refonte «à la Chrétien», propose un groupe de réflexion (Noovo Info, May 15, 2025) Ottawa urged to tackle bureaucratic bloat with Chrétien-era cuts (Western Standard, May 19, 2025)	Interview (in French) with Gabriel Giguère (Reg against le matin, BLVD 102.1, May 15, 2025) Interview (in French) with Renaud Brossard (Benoit Dutrizac, QUB Radio, May 15, 2025)

This Viewpoint was prepared by Conrad Eder, Associate Researcher at the MEI, in collaboration with Gabriel Giguère, Senior Policy Analyst at the MEI. The MEI’s Regulation Series aims to examine the often unintended consequences for individuals and businesses of various laws and rules, in contrast with their stated goals.

Successive federal governments have left their mark on the size and scope of the Canadian public service. In contrast to his predecessors, Justin Trudeau’s tenure as prime minister was characterized by a significant expansion of the federal bureaucracy, substantially driving up personnel costs and exacerbating fiscal pressures.(1)

To rein in the federal bureaucracy, while simultaneously taking a meaningful step toward restoring Canada’s fiscal health, policymakers should emulate the Chrétien government’s 1994 Program Review. Put in place under circumstances similar to those we face today, it managed to reduce the size of the federal public service while eliminating Canada’s deficit, reducing the national debt, and lowering overall government spending.(2) Today, a comparable reduction of the federal workforce would reduce federal government spending by $9.5 billion through 2029.(3)

From Fiscal Discipline to Bureaucratic Bloat

The expansion of Canada’s federal public service under Justin Trudeau represented a departure from the approach of previous administrations. Between 1984 and 2015, successive governments led by Brian Mulroney, Jean Chrétien, Paul Martin, and Stephen Harper all maintained or reduced the size of the federal workforce relative to the size of the Canadian population.(4) Abruptly changing course, the Trudeau government grew the federal public service by over 100,000 employees—a 40% hike in absolute terms—increasing the size of the bureaucracy from approximately 7 federal employees per 1,000 Canadians up to 9 per 1,000(5) (see Figure 1).

By international standards, Canada has an oversized bureaucracy. Despite having fewer responsibilities, Canada maintains a proportionately larger federal workforce than that of the United Kingdom. And compared to Germany, which has similar governmental responsibilities, Canada has about 50% more federal employees per 1,000 residents.(6)

Having a bloated federal bureaucracy has fiscal consequences. Federal personnel costs in Canada were on track to exceed $70 billion for the first time this past fiscal year, nearly double the amount spent on personnel prior to Justin Trudeau’s election.(7) These outsized costs contribute to the federal government’s chronic annual deficits, further growing Canada’s national debt.

Chrétien’s Approach to Reshaping the Public Service

When Jean Chrétien took office in 1993, Canada faced a federal bureaucracy with a similarly high ratio of employees to population, persistent deficits, and a growing national debt.(8) These fiscal pressures prompted his government to initiate a comprehensive program review in May of 1994.

This program review was fundamentally different from previous cost-cutting exercises in terms of both scope and execution. It used clear criteria to evaluate federal programs, ensuring they were aligned with public needs, were cost-effective, and fit within the government’s fiscal framework. The review also considered the necessity of federal involvement across program areas, explored alternative delivery models, and looked at whether resources were being used efficiently.(9)

The results of this program review were transformative, successfully lowering the ratio of federal employees to population, eliminating Canada’s deficit, and reducing the national debt.(10) From 1994 to 1999, the government decreased the federal workforce by over 42,000 public employees—a reduction of 17.4%(11)—using strategies such as voluntary exit incentives, natural attrition, privatization of services, and delegation of program responsibilities to other levels of government.

These reforms demonstrate that Canada can successfully reduce the size of its federal bureaucracy, and that this can deliver substantial fiscal benefits.

A Blueprint for Modern Public Service Reform

The size of the Canadian public service once again requires attention. Despite the government belatedly acknowledging the need to restrain the growth of the federal bureaucracy,(12) more decisive action is required.

With Canadians eager to see a reduction in the size of the federal workforce,(13) policymakers should look to the 1994 Program Review as a model for reform. The government should adopt a thoughtful approach to ensure workforce reductions are strategic by combining voluntary departures and natural attrition with targeted reductions. In recent years, retirements and resignations together have averaged 3.9% of the federal workforce annually.(14) Leveraging artificial intelligence and other digital tools could further bolster efforts to downsize the federal public service.(15)

Achieving similar results today—a 17.4% reduction in the size of the federal workforce over five years—would decrease the number of federal employees by approximately 64,000, effectively restoring the federal public service to its relative size prior to Justin Trudeau’s election as prime minister.(16) Fully implemented, these workforce reductions would permanently lower federal government spending by nearly $10 billion a year.(17)

By drawing inspiration from the Chrétien government’s program review, Canada can rein in its federal workforce, eliminating tens of billions of dollars in federal spending, while laying a solid fiscal foundation for the sustained economic prosperity of Canadians.